Connecticut Passes Nation’s Strictest Crypto Ban
Connecticut enacted sweeping legislation banning government crypto investments, contrasting sharply with state-level Bitcoin reserve initiatives.
Key Provisions
- Comprehensive ban: Prohibits “all state and local governments” from purchasing, holding, or investing in virtual currencies.
- No crypto reserves: Explicitly outlaws establishing a virtual currency reserve.
- No crypto payments: Bars accepting cryptocurrency as payment for state or political subdivision debts.
- Consumer warnings: Mandates “bold” fraud warnings highlighting irreversible transactions and irrecoverable losses.
- Risk disclosures: Requires crypto businesses to disclose “all material risks” associated with digital assets.
- Age restrictions: Imposes verification requirements for users under 18.
Strong Contrast to National Trend
Connecticut’s actions stand in stark opposition to a growing national trend. While the state enacted its ban, legislative data indicates:
- 31 active Bitcoin reserve bills across 16 states.
The law positions Connecticut as a major restrictionist state in crypto regulation.
Recent Developments
Just prior to Connecticut’s legislation, New Hampshire became the first state to establish a strategic Bitcoin reserve. Arizona recently adopted a more limited pilot program using Bitcoin for non-tax revenue funds.
Background
The legislation positions itself as one of the most restrictive state-level approaches to cryptocurrency. Beyond prohibitions on investments and crypto payments, it overhauls money transmission statutes and introduces enhanced regulatory frameworks for crypto service providers.
